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S&P 500 breaches 1,700 mark

US stocks on the Standard & Poor’s 500 Index rallied last night, sending the index above 1,700 for the first time, as central banks worldwide join a chorus to maintain stimulus to reassure improvement in the global economic wheel.

The S&P 500 rose 1.3% to 1,706.87 in New York yesterday, whilst the Dow Jones Industrial Average advanced to a record 15,628.02. Data showed that almost 6.8 billion shares changed hands, 7% above the three-month average.

Chief Equity Strategist Phil Orlando explained that, “Central banks throughout the world remain accommodative… All of the data from an economic standpoint is telling that the economy is continuing to get better, the labour market is improving, and corporate earnings are coming in better than expected. So this market should continue to work higher”.

The boost in sentiment came after the Fed announced yesterday that persistently low inflation could hamper the economy and therefore pledged to keep buying $85 billion in bonds every month – amidst data which showed that the US economy grew more than projected in the second quarter.

Moreover, European Central Bank President Mario Draghi also said yesterday that recent economic indicators signal that the Euro region has made it through the worst and reiterated that officials plan to keep interest rates low for the foreseeable future.